Arsenal have pulled out of the running to sign Alvaro Morata after Real Madrid slapped a huge £60million valuation on his head.

Real have decided to exercise a clause in the 23-year-old’s contract at Juventus which means he will be heading back to the Bernabeu, and they are ready to sell him on at a huge profit.

The Gunners along with Chelsea have long been linked, but reports claim Arsene Wenger will not be pursuing an interest due to Real’s staggering valuation.

A club statement read: “Real Madrid have informed Juventus of their decision to recover the federative rights on the player Alvaro Morata, who will join up with the first team for pre-season training under the orders of Zinedine Zidane.”

The fee for Morata has not been announced but reports in Spain suggest it is in the region of 30million euros (£23million), which means they aim to make almost £40million by selling him on.

Juve general director Giuseppe Marotta had earlier revealed the striker, who has started both of Spain’s matches in Euro 2016 so far and scored twice in Friday’s 3-0 win against Turkey, would be heading back to his homeland.

“Real Madrid will exercise their right to repurchase,” Marotta said in quotes posted on Marca.

“We expect their offer in writing in the coming day, then we’ll see, but the number of possibilities that remain are few, and we will try to replace him with an equally-good player.”